RATING RATIONALE
24Aug2022

Ajanta Soya Ltd.

Brickwork Ratings upgrades the ratings for the Bank Loan Facilities of Rs. 130.00 Crs. of Ajanta Soya Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(13 May 2021)
Present
Fund Based 15.00 15.00 Long Term BWR BBB /Stable
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BWR BBB + /Stable
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Non Fund Based 115.00 115.00 Short Term BWR A3+
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BWR A2
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Grand Total 130.00 130.00 (Rupees One Hundred Thirty Crores Only)
#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure


RATING ACTION / OUTLOOK

Brickwork Ratings (BWR) has upgraded the long-term rating to BWR BBB+ (Stable) and short-term rating to BWR A2 for the bank loan facilities of Ajanta Soya Ltd (ASL or “the company”). 

The revision in the ratings takes into account the overall improvement in business and financial risk profile of the company in FY22 and Q1FY23, marked by increasing scale of operations and healthy capital structure and comfortable debt coverage indicators. The ratings continue to derive strength from the established track record of the operations, experienced promoters, diversified product portfolio, widespread distribution network and reputed client base. The ratings are, however,constrained by the susceptibility of margins to any adverse fluctuations in the raw material prices and forex rates coupled with inherent risk in the industry of intense competition. 

Outlook: Stable 

BWR believes that the business and financial risk profile of ASL will be maintained over the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. The outlook may be revised to 'Positive' in case revenue, profitability and solvency position show a sustained improvement leading to an improved financial and liquidity profile. The rating outlook may be revised to 'Negative' in case the profitability generated is much lower than anticipated, there are aggressive debt-funded capex plans, or there is a significant deterioration in the overall liquidity profile of the company.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, BWR has applied its rating methodology on a standalone basis as detailed in the rating criteria detailed in the criteria links below.

RATING SENSITIVITIES

Positive: BWR may revise the ratings upward in the case there is substantial improvement in revenue, profitability and overall financial risk profile of the company. 

Negative: BWR may revise the rating downward in the case there is substantial decline in revenues, profitability or there is a material moderation in the solvency or overall liquidity profile of the company.

LIQUIDITY INDICATORS - Adequate

The company has an adequate liquidity position. There are no long term secured/unsecured borrowings from banks/NBFC as on March 31, 2022. The company generated cash accruals of Rs. 42.45 Crs in FY22 against a NIL CPLTD. For FY23 also, the company is projected to generate cash accruals of Rs. 39.58 Crs against a NIL CPLTD. thereby indicating an adequate liquidity position. Working capital utilization for the FB limit stood at almost NIL in the last 12 months ended July-2022; while, for the NFB limits it remained at ~85%.

ABOUT THE ENTITY

Ajanta Soya Ltd. (ASL) was incorporated on 13th January 1992 under companies Act, 1956. The Company is engaged in the primary business of manufacturing of Vanaspati and various kinds of cooking oil with shortening products for bakery like biscuits, puffs, pastries and other applications. Various brand names used by the company include Dhruv, Aanchal, Parv, ASL Pure, Nutri 1992 and Fine Fingers. ASL also offers its products as food ingredients to serve food manufacturers and the food service industry. Listed on Bombay Stock Exchange Ltd., the company went Public with the Initial Public Offering in the year 1993. The plant of the company is located in the industrial town of Bhiwadi, Rajasthan.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 21-22
(Audited)
FY 20-21
(Audited)
Operating Revenue Rs.Crs. 1345.14 931.40
EBITDA Rs.Crs. 47.48 36.34
PAT Rs.Crs. 42.20 25.14
Tangible Net Worth Rs.Crs. 123.19 79.35
Total Debt/TNW Times Not Available 0.04
Current Ratio Times 1.58 1.58

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2022) 2021 2020 2019
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 15.00
BWR BBB+/Stable
(Upgrade)
13May2021
BWR BBB Stable
(Upgrade)
07Apr2020
BWR BBB- Stable
(Assignment)
NA
NA
Non Fund Based ST 115.00
BWR A2
(Upgrade)
13May2021
BWR A3+
(Upgrade)
07Apr2020
BWR A3
(Assignment)
NA
NA
Grand Total 130.00 (Rupees One Hundred Thirty Crores Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.

Hyperlink/Reference to applicable Criteria
Analytical Contacts

Aanchal Gupta

Ratings Analyst aanchal.g@brickworkratings.com

Sudeep Sanwal

Associate Director - Ratings sudeep.s@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Ajanta Soya Ltd.
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Name of the Bank/Lender Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 Standard Chartered Bank Letter of CreditSanctioned _ 30.00 30.00
2 Standard Chartered Bank Credit Exposure Limit (CEL)Sanctioned _ 4.00 4.00
3 State Bank Of India (SBI) ILC/FLCSanctioned _ 73.00 73.00
4 State Bank Of India (SBI) Credit Exposure Limit (CEL)Sanctioned _ 6.00 6.00
5 State Bank Of India (SBI) Cash CreditSanctioned 15.00 _ 15.00
6 State Bank Of India (SBI) Bank GuaranteeSanctioned _ 2.00 2.00
Total 15.00 115.00 130.00
TOTAL (Rupees One Hundred Thirty Crores Only)
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About Brickwork Ratings

Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 12,000 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.

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